Weakness in US healthcare stocks dragged down the Nasdaq which fell over 3%. The S&P500 fell 2.6%, while the Dow dropped 1.9%.

Interest Rates:

US treasuries rose as the downturn in sentiment boosted demand for safe havens.

The yield on 10-year US treasury notes fell 7 basis points to 2.09%. Comments by Fed President Dudley appeared to have little impact on financial markets, which stood in contrast to comments by other Fed speakers.

Base metals including copper also weakened following the weak Chinese data.

Gold failed to benefit from any safety bid, also dropping on the possibility that the Fed could raise rates later this year.

Australia:

No data to report.

China:

The profits of industrial companies in China fell 8.8% in the year to August.

Profits in the mining sector were down 57.3% over the year while those in the manufacturing sector rose 4.5%.

United States:

Personal income and spending rose 0.3% and 0.4%, respectively in August. Both outcomes were close to expectations, although there were upward revisions for July.

Both headline and core PCE inflation were in line with expectations with annual growth of 0.3% and 1.3%, respectively.

Core PCE inflation edged up from an annual pace of 1.2% in September but remains well contained. The ongoing moderate growth in consumer spending and slight firming of core inflation will keep alive the possibility of a Fed rate hike this year.